MONARCH ENVIRONMENTAL, INC. v. VELOCITOR SOLUTIONS et al
Filing
27
OPINION. Signed by Judge Jerome B. Simandle on 9/27/2011. (dmr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
MONARCH ENVIRONMENTAL, INC.,
HON. JEROME B. SIMANDLE
Plaintiff,
Civil No. 11-03041 (JBS-AMD)
v.
OPINION
VELOCITOR SOLUTIONS, et al.,
Defendants.
APPEARANCES:
Colin G. Bell, Esq.
HANKIN SANDMAN & PALLADINO
30 South New York Avenue
Atlantic City, NJ 08401
Counsel for Plaintiff
Jonathan I. Rabinowitz
RABINOWITZ, LUBETKIN & TULLY, LLC
293 Eisenhower Parkway, Suite 100
Livingston, NJ 07039
Counsel for Defendants
SIMANDLE, District Judge:
I.
INTRODUCTION
Plaintiff Monarch Environmental, Inc. (“Monarch”), a
Delaware corporation, with its principal place of business and
citizenship in New Jersey, filed this action against Defendant
Velocitor Solutions (“Defendant”),1 a business entity with its
1
Plaintiff’s Complaint also names various unidentified
ABC Partnerships 1-5, DEF Partnerships 1-5, and GHI Limited
Liability Companies 1-5 entities as defendants.
1
principal place of business and citizenship in North Carolina,
alleging breach of contract, unjust enrichment, violation of the
New Jersey Consumer Fraud Act (“CFA”), violation of the North
Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”), and
declaratory judgment. Presently before the Court is Defendant
Velocitor’s motion [Docket Item 15] to transfer venue from this
Court to the Western District of North Carolina, pursuant to 28
U.S.C. § 1404(a). For the reasons set forth below, the Court will
deny Defendant’s motion.
II.
BACKGROUND
Plaintiff, engaged in the business of servicing oil tanks,
entered into negotiations with Defendant regarding software and
equipment that would allow Plaintiff’s employees to communicate
more efficiently with customers and relay information to
Plaintiff’s headquarters. (Compl. ¶¶ 8-12.) During the
negotiations, Maureen Spaziani, Plaintiff’s then vice-president,
was Defendant’s main contact. (Def.’s Br. in Supp. of Mot. to
Transfer 11); (Pl’s Br. in Opp. to Def.’s Mot. to Transfer 2-3,
13). During June 2008, the parties entered into an agreement.
(Compl. ¶ 14.) Defendant sent a proposed agreement to Plaintiff.
(Compl. ¶ 13.) Ms. Spaziani signed the agreement and returned it
to Defendant, who in turn, executed the agreement. (Def.’s Br. in
Supp. of Mot. to Transfer 2).
2
This lawsuit arises out of Plaintiff’s allegations that
Defendants improperly “double billed” Plaintiff, breached their
contract with Plaintiff by deactivating the software, rendering
the equipment useless, and failed to deliver further equipment as
the agreement provides. (Compl. ¶¶ 19-21.) Defendant believes
that this lawsuit should be transferred to the Western District
of North Carolina due to the “parties’ contractual choice of a
North Carolina forum and [the agreement’s] selection of North
Carolina as the governing law.” (Def.’s Br. in Supp. of Mot. to
Transfer 14).
III. DISCUSSION
A.
Section 1404(a) Standard
Under 28 U.S.C. § 1404(a) “[f]or the convenience of parties
and witnesses, in the interest of justice, a district court may
transfer any civil action to any other district or division where
it might have been brought.” The Court of Appeals has directed
courts, in addition to the three enumerated factors in § 1404(a),
to “consider all relevant factors to determine whether on balance
the litigation would more conveniently proceed and the interests
of justice be better served by transfer to a different forum.”
Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995)
(internal quotations and citations omitted). Thus, “[c]ourts
ruling on § 1404(a) motions have accordingly taken into account a
3
wide range of public and private interests in determining whether
a transfer is appropriate.” Yocham v. Novartis Pharm. Corp., 565
F. Supp. 2d 554, 557 (D.N.J. 2008).
The Jumara court identified several private interests courts
should consider:
plaintiff’s forum preference as manifested in
the
original
choice;
the
defendant’s
preference; whether the claim arose elsewhere;
the convenience of the parties as indicated by
their
relative
physical
and
financial
condition;
the
convenience
of
the
witnesses—but only to the extent that the
witnesses may actually be unavailable for
trial in one of the fora; and the location of
books and records (similarly limited to the
extent that the files could not be produced in
the alternative forum).
Jumara, 55 F.3d at 879 (citations omitted). Among the public
interests courts should consider are:
the enforceability of the judgment; practical
considerations that could make the trial easy,
expeditious, or inexpensive; the relative
administrative difficulty in the two fora
resulting from court congestion; the local
interest in deciding local controversies at
home; the public policies of the fora; and the
familiarity of the trial judge with the
applicable state law in diversity cases.
Id. at 879–80 (citations omitted). “It is well-settled that the
burden on a § 1404(a) motion must be borne by the party seeking
to transfer the case, and that ‘the motion must not be lightly
granted.’” Yocham, 565 F. Supp. 2d at 557 (quoting Charles A.
Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and
Procedure: Jurisdiction 3d § 3848); see also Shutte v. Armco
4
Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970), cert. denied, 401
U.S. 910 (1971). “[T]he plaintiff’s choice of forum will not be
disturbed unless the balance of interest tilts strongly in favor
of a transfer.” Reed v. Weeks Marine, Inc., 166 F. Supp. 2d 1052,
1057 (E.D. Pa. 2001) (citing Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 508–09 (1947)).
B.
Application of Section 1404(a) to this Case
In support of its motion, Defendant argues that this case
should be transferred to the Western District of North Carolina
because “the existence of a valid forum selection clause” and the
private and public interest factors weigh in favor of such a
transfer. (Def.’s Br. in Supp. of Mot. to Transfer 2). As the
Court explains below, it finds that the private and public
interests in this case do not weigh strongly in favor of
transferring, and that Defendant’s motion should thus be denied.
1.
Private Interest Considerations
First, the Court finds that the private interest
considerations in this case do not weigh strongly in favor of
transferring to the Western District of North Carolina.
a.
Plaintiff’s Choice of Forum
The first private factor, the plaintiff’s choice of forum,
is entitled to great deference and “is a paramount consideration
5
which should not be lightly overruled,” especially when the
plaintiff chooses his or her home forum. Tischio v. Bontex, Inc.,
16 F. Supp. 2d 511, 521 (D.N.J. 1998); Shutte, 431 F.2d at 25. As
Plaintiff has chosen this District as the forum, which is
Plaintiff’s home forum, this factor weighs heavily against
transfer.
b.
Forum Selection Clause
However, this “strong presumption” in favor of Plaintiff’s
choice “is not dispositive.” Id. at 25. Parties’ “private
expression of their venue preferences” in the form of a forum
selection clause should also be given “substantial
consideration.” Jumara, 55 F.3d at 880. A forum selection clause
can be “mandatory or permissive.” Sahara Sam’s Oasis, LLC v.
Adams Co., Inc., Civ. No. 10-0881, 2010 WL 3199886, at *5 (D.N.J.
Aug. 12, 2010). “A permissive forum selection clause constitutes
consent by the parties to jurisdiction in a particular forum,
while a mandatory one establishes the particular forum as the
exclusive venue for litigating disputes that arise under the
contract.” Id. at *5 (citing Plum Tree, Inc. v. Stockment, 488
F.2d 754, 758 n.7 (3d Cir. 1973)). This District has held that
nonexclusive (i.e. permissive) forum selection clauses have a
less determinative effect than mandatory clauses. Ramada
Worldwide, Inc. v. Bellmark Sarasota Airport, LLC, Civ. No.
6
05-2309, 2006 WL 1675067, at *2-3, (D.N.J. June 15, 2006).2
Nevertheless, “a permissive forum selection clause is a factor
considered in § 1404(a) motions,” regardless of its “exact
weight.” Travelodge Hotels, Inc., 2007 WL 2156367, at *20.
Plaintiff and Defendant’s agreement provides, in pertinent
part:
This Agreement shall be governed by, performed
under and construed in accordance with the
commercial laws, but not the conflict of laws
provisions, of the state of North Carolina.
The Parties Consent to the nonexclusive
jurisdiction of, and venue in, any federal or
state court of competent jurisdiction located
in North Carolina for the purposes of
adjudicating any matter arising out of or
relating to this Agreement.
(Def.’s Br. in Supp. of Mot. to Transfer Ex. A at 7) (emphasis
added). Plaintiff argues that Defendant anticipated “the
possibility of litigating in New Jersey” by only providing a
permissive/nonexclusive forum selection clause, and thus,
Defendant’s preference and the agreement’s nonexclusive forum
selection clause carry little weight. (Pl’s Br. in Opp. to Def.’s
Mot. to Transfer 11). Conversely, Defendant asserts that the
2
However, “[c]ourts are in disagreement over whether
permissive forum selection clauses are subject to less
consideration than mandatory ones when determining whether to
transfer under § 1404(a).” Travelodge Hotels, Inc. v. Mangat
Houston Race Track, LLC, Civ. No. 06-3543, 2007 WL 2156367, at *7
(D.N.J. July 25, 2007). Compare Haagen-Dazs Shoppe Co. v. Born,
897 F. Supp. 122, 125 (S.D.N.Y. 1995) (“permissive nature of the
forum selection clause need not affect the weight it is given”),
with Ramada Worldwide, Inc., 2006 WL 1675067, at *2 (nonexclusive
forum selection clause “lessens its determinative effect”).
7
nonexclusive forum selection clause “reflects the plaintiff’s
initial choice,” and, when coupled with the fact that North
Carolina law applies, favors transfer to North Carolina. (Def.’s
Br. in Supp. of Mot. to Transfer 10, 14).
By its terms, the agreement contains a permissive forum
selection clause and lacks any mandatory language. Either way,
“the existence of a forum selection clause, whether permissive or
mandatory, [does] weigh[] in favor of transfer.” Cancer Genetics,
Inc. v. Kreatech Biotechnology, B.V., Civ. No. 07-273, 2007 WL
4365328, at *5 (D.N.J. Dec. 11, 2007). The “absence of a
mandat[ory] forum” selection clause though, “suggests that other
factors may make another forum more convenient or appropriate.”
De Lage Landen Fin. Servs., Inc. v. Elite Tech. (N.Y.), Inc.,
Civ. No. 09-1538, 2009 WL 3152163, at *3 (E.D. Pa. Sept. 30,
2009); see also Lucent Tech. Inc. v. Dicon Fiberoptics, Inc.,
Civ. No. 05-2534, 2006 WL 2290522, at *3 (D.N.J. Aug. 8, 2006)
(noting that a permissive “forum selection clause, while
deserving [of] some weight, is not entitled to great deference
and does not bar transfer).
Thus, the presence of the nonexclusive/permissive forum
selection clause in the Monarch-Velocitor agreement favors
transfer to North Carolina.
c.
Where the Claim Arose
Important to a § 1404(a) analysis is where “the operative
8
facts occurred.” Days Inn Worldwide, Inc. v. Inv. Prop. of
Brooklyn Ctr., LLC, Civ. No.08-390, 2009 WL 3153277, at *4
(D.N.J. Sept. 25, 2009). “[T]he location of the events . . . that
give rise to” a substantial part of the claim should be
evaluated. Cottman Transmission Sys. Inc. v. Martino, 36 F.3d
291, 294 (3d Cir. 1994). A breach of contract claim arises “at
the place of performance of the contract . . . [i.e.] where the
alleged non-conforming goods were manufactured, not their place
of destination.” E.E. Cruz & Co., Inc. v. Alufab, Inc., Civ. No.
06-262, 2006 WL 1344095, at *6 (D.N.J. May 16, 2006) (citing
Thorlabs, Inc. v. Townsend Commc’n, LLC, Civ. No. 03-4550, 2004
WL 1630488, at *4 (D.N.J. June 30, 2004)).
Plaintiff argues that its claims arose in New Jersey, making
transfer to North Carolina improper. Plaintiff asserts that,
among other things, its claims arose when Defendant did not
deliver the equipment specified under the contract to Plaintiff’s
facility in New Jersey, as well as, when Defendant delivered
false invoices to New Jersey. However, under Cottman and E.E.
Cruz & Co., these allegations favor transfer; the claim in this
case arose where the equipment was manufactured and the place of
performance of the contract, both of which were North Carolina.
Thus, this factor favors transfer.
d.
Convenience of the Parties and Witnesses
Nonetheless, Defendant has not shown that the convenience of
9
the parties and witnesses “strongly” weigh in favor of transfer.
Sandvik, Inc. v. Cont’l Ins. Co., 724 F. Supp. 303, 304 (D.N.J.
1989). A substantial private interest consideration weighs
against transfer; “[c]ompulsory process over potential witnesses
is perhaps the single most important factor in a 1404(a)
analysis.” Newhall v. Chase Home Fin. LLC, Civ. No. 10-2749, 2010
WL 4387517, at *5 (D.N.J. Oct. 28, 2010); see also In re
Consolidated Parlodel Litig., 22 F. Supp. 2d 320, 324 (D.N.J.
1998). “The law is clear: ‘unless the balance of convenience of
the parties is strongly in favor of defendant, the plaintiff’s
choice of forum should prevail.’” Marek v. Schneider Nat., Inc.,
Civ. No. 08-2193, 2008 WL 3887613, at *3 (D.N.J. Aug. 18, 2008)
(emphasis added) (quoting Shutte, 431 F.2d at 25). “Non-party
witnesses . . . may be compelled to attend only by the subpoena
power of federal courts;” however, Federal Rule of Civil
Procedure 45(b)(2) limits “federal subpoena power to within 100
miles of the courthouse,” where the witness is outside the
district. Newhall, 2010 WL 4387517, at *5 (citing Fed.R.Civ.P.
45(b)(2)). “A forum’s inability to reach [key] non-party
witnesses outside of this radius is therefore an important factor
weighing against transfer.” Newhall, 2010 WL 4387517, at *5
(citing LG Elecs., Inc. v. First Int’l Computer, Inc., 138 F.
Supp. 2d 574, 590-91 (D.N.J. 2001)); see also Solomon v. Cont’l
Am. Life Ins. Co., 472 F.2d 1043, 1047 (3d Cir. 1973) (noting
10
that “the amenability of at least seven crucial witnesses to
compulsory process in North Carolina and not in New Jersey”
weighed in favor of transfer). Furthermore, “[m]erely citing
witnesses’ residences and offices, without more, does not
establish inconvenience or unavailability.” Gonzales v. Supervalu
Transp., Inc., Civ. No. 07-5437, 2008 WL 943018, at *3 (E.D. Pa.
Apr. 3, 2008) (requiring “specific factual allegations” of
witnesses’ unavailability). The Marek court held that the “mere
fact” a substantial part of claim — in Marek, a car accident —
took place in the venue the defendant was seeking transfer to,
was “insufficient to outweigh the factors set forth by Plaintiff:
the fact that Plaintiff’s treating physicians” were in New
Jersey, “New Jersey [wa]s Plaintiff’s choice of forum . . . [and]
the [Plaintiffs’] financial hardship litigating in the Western
District.” Marek, 2008 WL 3887613, at *2. “The location of the
parties likewise does not thwart litigating this action in New
Jersey.” Omega Fin. Servs., Inc. v. Innovia Estates & Mortg.
Corp., Civ. No. 07-1470, 2007 WL 4322794, at *3 (D.N.J. Dec. 6,
2007) (citing DiRienzo v. Philip Servs. Corp., 294 F.3d 21, 23-27
(2d Cir. 2002) (holding that venue in New York was proper despite
the majority of witnesses and documents being located in Toronto,
since modern travel is not prohibitively burdensome in terms of
cost or time)).
Defendant’s claim that a majority of its witnesses will be
11
inconvenienced because they must travel from North Carolina is
insufficient to outweigh Plaintiff’s private interests —
Plaintiff’s inability in North Carolina to subpoena a key witness
for Plaintiff, Maureen Spaziani, its former vice-president who
was terminated in early 2009. see Fed.R.Civ.P. 45(b)(2). Spaziani
was the point person of the Monarch-Velocitor negotiations, and
she executed the agreement. Spaziani lives within the vicinity of
this District which is more than 100 miles from any district in
North Carolina. Due to the nature of Spaziani’s departure from
employment with Plaintiff, the Court finds plausible Plaintiff’s
claim that her appearance as a witness will require a subpoena.
Spaziani would likely be unavailable in North Carolina. Thus, the
Court finds that this factor weighs heavily against transfer. See
Newhall, 2010 WL 4387517, at *5.
e.
Location of Records
As Plaintiff points out, both parties maintain their
respective books and records in their home states. Thus, the
remaining private factor, “‘location of books and records,’” does
not “tip the scales in either direction” with regard to transfer.
Yocham, 565 F. Supp. 2d at 559 (quoting Jumara, 55 F.3d at 879).
In summary, the Court finds on balance that § 1404(a)’s
private interest considerations weigh against transferring the
case.
2.
Public Interest Considerations
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For similar reasons, the Court does not find that the
considerations of the public interest weigh so strongly in favor
of transfer as to warrant disturbing Plaintiff’s choice of forum.
A judgment in this case would be enforceable in both New Jersey
and North Carolina. See Jumara, 55 F.3d at 879. Similarly, “the
likelihood that parties, documents, and witnesses will have to be
transported from one forum to another regardless of where this
case is litigated means that ‘practical considerations that could
make the trial easy, expeditious, or inexpensive’ do not favor
either forum.” Yocham, 565 F. Supp. at 559 (quoting Jumara, 55
F.3d at 879). Additionally, both parties acknowledge that there
does not appear to be any conflict of laws that weigh for or
against transfer.
The remaining public interest considerations could
conceivably tip in Defendant’s favor, but “they are plainly
insufficient to meet the heavy burden a defendant bears when
moving to disturb a plaintiff’s choice of forum.” Yocham, 565 F.
Supp. 2d at 559. See Sandvik, 724 F. Supp. at 307 (citations
omitted) (“requir[ing] something more than a mere preponderance
of the evidence in favor of transfer”). Defendant suggests that
court congestion favors transfer to North Carolina.3 However,
3
The median time from filing to disposition of a civil
case is the most accurate predictor of how quickly the typical
case moves through the court’s docket, rather than the statistic
measuring the median time from filing to trial, since trial
occurs in so few instances. Both the District of New Jersey and
13
“although courts may consider calendar congestion in ruling upon
a § 1404(a) motion, relative congestion of the respective courts’
dockets is not a factor of great importance in this type of
motion.” Clark, 255 F. Supp. 2d at 339; see also Yocham, 565 F.
Supp. at 560. Furthermore, while “‘familiarity of the trial judge
with the applicable state law,’ is a consideration that could tip
the balance in an otherwise close call, the Court notes that
federal district courts are regularly called upon to interpret
the laws of jurisdictions outside of the states in which they
sit.” Id. (quoting Jumara, 55 F.3d at 880). Thus, this factor
only slightly favors transfer. Similarly, although this Court
acknowledges that North Carolina matters should be decided
locally, Defendant has conducted business in New Jersey. See
Granger v. REO Elite Abstract, Inc., Civ. No. 09-0511, 2010 WL
276207, at *3 (D.N.J. Jan. 15, 2010) (noting that conducting
business in a forum other than where the claims arose is of some
the Western District of North Carolina enjoy prompt disposition
times, namely 6.7 months for New Jersey and 6.2 months for the
Western District. Administrative Office of the U.S. Courts,
Judicial Business of the United States Courts, 2010 (available at
www.uscourts.gov/cgi-bin). The present case is a typical example.
Removed to this Court on May 25, 2011, the first Scheduling
Conference was July 6, 2011, when a discovery deadline of
December 1, 2011 was set, a discovery confidentiality order was
put in place on August 24, 2011, and a settlement conference will
be convened on October 26, 2011 before Magistrate Judge Ann M.
Donio. If the case is not amicably resolved and counsel complete
their factual discovery on the claims and counterclaims by
December 1st, as ordered, there is no reason the case cannot be
tried around the time of its first birthday in May, 2012.
14
significance).
As the foregoing discussion indicates, the public and
private considerations identified in Jumara do not “tip the scale
enough in Defendant[’s] favor” to transfer. Granger, 2010 WL
276207, at *4. Balancing these considerations, and acknowledging
that, “[u]nless the balance of inconvenience of the parties is
strongly in favor of Defendant, [Plaintiff’s] choice of forum
should prevail,” the Court finds that a transfer would not
substantially improve the convenience of parties and witnesses,
nor serve the interest of justice pursuant to 28 U.S.C. § 1404.
IV.
CONCLUSION
For the reasons explained above, the Court finds that this
case should not be transferred to the Western District of North
Carolina, and will thus deny Defendant’s motion. The accompanying
Order will be entered.
September 27, 2011
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
United States District Judge
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